PKNS eyes potential investors to take up RM700m sukuk at MIPIM Asia

HONG KONG (Nov 15): The Selangor State Development Corporation (PKNS) is scouting for potential investors to take up its RM700 million Sukuk (Islamic Bond) issuance.

Announcing this, PKNS deputy general manager (corporate affairs) Datin Paduka Norazlina Zakaria said PKNS was currently finalising issuance of the sukuk with the relevant Malaysian authorities.

"We hope to come up with the sukuk by next month," she told Bernama on the sidelines of MIPIM Asia 2011, a prominent real estate event in the Asia-Pacific region, which begins on Tuesday at the Hong Kong Convention and Exhibition centre.

Besides being a prominent property developer, Norazlina said PKNS's experience with the capital market extends back to the mid-1990s when the Islamic capital market was at its infancy.

She said PKNS issued its inaugural Islamic securities, an Islamic Underwritten Facility in 1996, when the term sukuk was virtually unknown in Malaysia and was not even considered as a financial jargon.

"We want to tell investors here that we have the project. With regard to financial credit worthiness of the company, we are rated very highly at P1, the highest rating by the rating agency in Malaysia, which is coming up with new issues.

"If they (the investors) are interested, they can come to Malaysia Pavilion. We have appointed our AmInvestment Bank as our lead manager," she said, adding that the new sukuk issuance was the third of its kind.

Based on its consistent track record, Norazlina said PKNS had proven itself to be a credible issuer in the Malaysian capital market with "our issuances receiving strong demand and oversubscription.

She said PKNS has continuously enjoyed competitive rates whether from its private placements or issues or via tender process for its medium term notes and commercial paper issuances, respectively.

"PKNS' sukuk issuances have been well-received by the investing public and this bodes well for PKNS for its future sukuk issuances.

Norazlina said the general marketing strategy employed for sukuk distribution would depend largely on various factors including security type, risk appetite and duration profile that investors demand.

She said certain tenures of a particular sukuk issue can be targeted to foreign investors due to currency appreciation and Malaysia's economic growth.

PKNS is among the Malaysian participants at the Malaysian Pavilion at MIPIM Asia 2011.

The Malaysian Pavilion is iniated by Malaysia Property Inc, a Malaysian government initiative that acts as a "bridge" between institutions, corporate and private investors to real estate investment opportunities in Malaysia.

PKNS was set up in 1964 as an agency to promote development in Selangor, Malaysia's most populous state.

Since its establishment 47 years ago, PKNS has built 12 cities and integrated townships, evolving from a developer of low-cost housing to one of Malaysia's leading real estate players.

It plays a pivotal role as the state’s master developer as it ventures into new growth areas such as urban regeneration projects and development of iconic landmarks. — Bernama